Structural issues cloud Khamenei’s Economic Vision

By Bijan Khajehpour, for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iran Business News.

It is now an established tradition that Iran’s supreme leader travels to Mashhad on the first day of the Iranian New Year, which fell on March 21 this year, to deliver his most important annual policy speech. This year’s speech was significant as it almost entirely dealt with economic conditions, an indication that the economy, especially unemployment, is a key concern of Iran’s top leadership.

When referring to the “enemy’s” desire to depict economic shortcomings as proof that the Islamic Republic is incapable of managing the country, the supreme leader, Ayatollah Ali Khamenei, acknowledged some internal deficiencies. He admitted, “Of course, there are some weaknesses, but these weaknesses are related to our management.”

While it is true that management shortcomings have been an ongoing issue, it would be a mistake to turn a blind eye to some of the other sources of tension in the Iranian economy. To be fair, Khamenei referred to a number of structural issues. His speech, however, did not recognize that major political, structural and legal reforms will be needed to address the deficiencies.

Khamenei used the speech to lay out his vision for Iran, which includes a “strong, reliable and self-sufficient economy.” He stated, “Without such a strong economy, we will neither achieve permanent dignity nor permanent security. We should provide these things. This is the significance of the economy.”

Later, he pointed to the two central issues, asserting, “So, one problem is the issue of unemployment and the people’s difficult condition. And there are various cultural and social problems which are an outcome of economic problems.”

The most clear-cut remedy to creating more jobs is to promote private sector investment. The question is whether the Iranian economy is conducive to such investment, given that it is dominated by such governmental and semi-state entities as religious, revolutionary and military foundations that make life difficult for the private sector.